Friday, May 01, 2015

Testing Shackle

Earl and Littleboy describe an empirical test of Shackle's (non-probabilistic) theory of choice under uncertainty done by Hey in the 1980s. The subjects were presented with three uncertain situations, asked to produce an exhaustive list of what might occur in each case, and then to rate each in terms of possibility, probability, and potential surprise.

The authors sum up the result of the experiment as follows: "Though Hey's findings were problematic for both Shackleian and probabilistic analyses of expectations, he felt on balance they were more damaging to Shackle's approach" (p. 134).

However, going by the description in the book, this does not seem like a very fair test of Shackle's theory. Shackle says that in typically situations, people do not try to make an exhaustive list of possibilities and then assign a probability weight to each: instead, they considered only certain attention-grabbing possibilities. To test this, Hey apparently told the subjects to make an exhaustive list of possibilities and assign probability weights to them! I suppose the results show that his subjects can follow directions, but they certainly do not demonstrate that in typical, unsupervised choices, people don't act as Shackle says they do. (I am not endorsing Shackle's theory here, merely stating that this does not seem like a good way to test it.)

It is as though Jones has claimed that New Yorkers, when stepping out in the morning, are typically not concerned with encountering a rampaging elephant outside their apartments. Smith, to test this claim, asks various New Yorkers to imagine that there might be a rampaging elephant outside their apartment in the morning, and then asks if this would worry them.